Every principal and partner of a small accounting firm wants to attract high value business clients. However, it seems that many of these clients don’t necessarily want to work with a smaller firm. Instead, they are often attracted to larger firms that come with the perception of high level tax and accounting advice and an integrated financial services offering. And, of course, a higher fee for service.
How many clients do you have with annual fees in excess of $20,000? For many smaller accounting firms, the number of these clients is relatively small. However, for other professional services, it’s a lot more common to clients to pay significant fees for services that they regard as valuable in helping them to achieve their goals. Perhaps the challenge is not the size of the firm, but the type of services traditionally provided by accounting firms and client perception of value.
As the principals and partners of accounting firms shift their focus from tax compliance to advice at an accounting, business and financial level, they are starting to see a shift in the way their clients perceive them. They are starting to attract clients that value the holistic advice they give. And they’re less inclined to service clients that simply want a tax compliance service.
The first step in attracting high value business clients is simply to make the decision to service these clients based on their needs and financial goals. If you’re unable to address their needs, then it’s likely that they not will be interested in your firm. A primary focus on tax compliance, whilst certainly providing core revenue and profit for your firm, will simply not help you to attract higher-level business clients. They are not coming to you for core services, but what you can add in the way of strategic advice.
What are the characteristics of these clients?
- High turnover (above $5 million)
- Sophisticated, established businesses
- Looking for growth or succession
- Proactive in managing their business
- Good financial understanding
- Recognise the value of specialist advice
What are these clients looking for? At a technical level, they may be seeking:
- Tax and accounting advice at a personal level
- Bookkeeping and virtual CFO services
- Business structuring and tax planning
- Support with wealth creation strategies
- Support with business growth and succession planning
They expect compliance work done efficiently and charged at market rates. They want value in relation to specific advice and feedback and are prepared to pay well above time cost for these services.
They’re also looking for someone who:
- Understands their needs and goals
- Challenges them to think differently
- Is proactive in communication and feedback,
- Has access to special knowledge e.g. ATO private binding rulings
- Has a strong external professional network of advisors
- Is technologically savvy and able to assist with software implementation
For many principals and partners of smaller firms, this ‘wish list’ seems unattainable. They’re stuck in the tax compliance mindset with a focus on production rather than relationships. It’s no wonder that these firms struggle to engage with high value business clients. They’re not even talking the same language as the clients they want to attract.
In general, high value business clients are looking for advice from their existing professional partners and will seek other specialist advice through referrals from these partners. They will also do their own research and may come across specific service providers to meet their needs through online searches. It’s by developing these connections that the principals and partners of smaller firms can begin to attract higher value clients. So, it’s not the size of the firm that matters, it’s the level of engagement and ongoing curiosity, concern and collaboration that you demonstrate with clients that increases their value.
Let’s look at 5 key strategies that will work in attracting high value business clients for firms of any size:
- Focus on a clear value proposition in the way you communicate with your business clients, your professional network and your target market. A strong value proposition has strong resonance (I need it), it has real differentiation (difficult to substitute) and it can be substantiated (I believe you). Your value proposition should state clearly what you can do to help business clients to achieve their financial goals. And to do this, you firstly need to understand their goals. This can only be achieved through curiosity and active listening.
- Develop a strong network of professional partners who can work with you to help your business clients achieve their goals. These partners may include financial advisors, lawyers, tax consultants, mortgage and insurance brokers, lending institutions and even marketers, IT and HR consultants. Your role is to act as the central point of contact (as project manager) in ensuring that all actions required to achieve the best outcome for the client are implemented. The value of your technical knowledge may even be secondary to the value you provide to clients through your network of other professionals.
- Create personal capacity to really engage with clients at a deeper level than you’re used to having with a tax compliance focus. You need to free up your time to make more time for proactive conversations with business clients about their issues and challenges, their goals and financial objectives. There’s no point in doing this on an ad hoc basis, it needs to be a consistent focus in the way that you engage with your clients. And the surprising thing is that the more you do this, the more likely you are to attract the type of business clients you want for your firm.
- Identify a target niche based on a differentiated specialist service, a specific industry or a particular type of client. Some examples may include a focus on virtual CFO services, direct engagement with health professionals, a focus on the agricultural sector or even a specific business type such real estate agents or franchisees. The benefit of a niche market is that it forces your firm to develop and present a clearly defined value proposition that is different to most other firms. The value in targeting a niche generally far exceeds any benefit of providing a generalist tax and accounting service to any client who walks in the door.
- Think less like a technician and more like a consultant, advisor and coach. Of course, it’s important to provide advice based on your technical expertise. However, in general, that’s what clients expect. It’s not a great differentiator. The real difference comes with the way you engage and communicate with your clients. By working collaboratively with clients to help them achieve their financial objectives, you’re immediately enhancing your role from one based on outputs to one focusing on processes. It’s the focus on process that often delivers exceptional outcomes for clients. And this is the real reason clients pay exceptional fees for advice.
The effort involved in attracting high value business clients can be easily lost if the same effort is not put into retaining them. You need to:
- Set clear expectations upfront through service level agreements
- Review scope of work with the client every year, without exception
- Be proactive with communication, don’t wait until the client calls you
- Adapt to changing client circumstances quickly and efficiently
- Challenge the client’s thoughts through interactive discussions
Too often, the principals and partners of smaller firms focus more on the software tools and technology that they use to deliver outputs than the simple changes in behaviour that really engage business clients. The best way to attract high value clients is to start engaging more proactively with your existing clients. You’ll be surprised at the latent value that exists within your client base, due to misplaced assumptions about what your clients really want and how much they are prepared to pay.
Would you prefer to have 500 clients with average annual fee of $2,000 or 100 clients with average annual fee of $10,000? The best place to start is to treat all your business clients as high value clients, engage directly with them and the opportunities will develop.